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Video Ad Sales Boost Twitter's Revenue

Twitter reported a 24 percent increase in fourth-quarter revenue on Thursday, helped by growth in its video advertising business.

However, the social media company posted a decline in monthly active users, due in part to its campaign of deleting millions of abusive accounts after facing criticism it was being used as a platform for political influence operations and hate speech.

Overall revenue rose to $909 million in the quarter. Total advertising revenue rose 23 percent to $791 million. More than half that revenue came from video ads placed by corporate clients.

Revenue from data licensing and other non-advertising businesses rose 35 percent from a year earlier to $117 million.

The number of average daily active users exposed to Twitter ads, a new figure disclosed by the company, rose to 126 million in the fourth quarter from 115 million a year ago and 124 million in the previous quarter.

Monthly active users totaled 321 million. That was down from 330 million a year earlier and 326 million in the third quarter. Twitter said that after the current quarter it would stop disclosing monthly active users.

For the current quarter, Twitter said it expected total revenue to be between $715 million and $775 million.

Twitter said it expects operating expenses to rise about 20 percent year-on-year in 2019 due to efforts to improve its service, above analysts’ average estimate of 12 percent.

It expects capital expenditures to be between $550 million and $600 million, well above analysts’ average estimate of $415 million for 2019.

"2018 is proof that our long-term strategy is working. Our efforts to improve health have delivered important results, and new product features like a single switch to move between latest and most relevant Tweets have been embraced by the people who use Twitter," said Jack Dorsey, Twitter's CEO. "We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service."

"Through our consistent strategy and solid execution, Q4 was a strong finish to the year. We're delivering great results with revenue up 24% year-over-year, steady sequential growth in total monetizable daily active users (mDAU) and revenue, along with GAAP profitability throughout the year," said Ned Segal, Twitter's CFO. "We're also continuing to demonstrate Twitter's unique value proposition for advertisers as the best place to launch something new or connect with what's happening."